Take-over plan ‘doomed to fail’ for second time

EU financial services chief Frits Bolkestein intends to expected to table fresh proposals by April, after his draft take-overs directive foundered on German opposition last summer.

But a new business think-tank this week said prospects looked bleak for the plan. “It’s unlikely they will get it through, even with alterations,” said Erik Berglöf, founding member of the European Corporate Governance Institute (ECGI).

He said more states now had reservations over the “new layer of legal uncertainty” the legislation would introduce. “We’re beginning to see other countries falling off the coalition,” he said, citing the UK and Sweden. The warning comes a week after company law experts recommended to the European Commission that firms be required to consult shareholders before taking action against hostile bids, and outlaw ‘multi-class’ shares that give more votes to some investors than to others.

“The reasons it fell down last time haven’t changed,” said Colin Mayer, Oxford professor and ECGI board member.